PBGC to Take St. Vincent’s Plan

September 14, 2010 (PLANSPONSOR.com) - The Pension Benefit Guaranty Corporation (PBGC) is moving to assume responsibility for the pension plan covering more than 9,500 workers and retirees of St. Vincent Catholic Medical Centers (SVCMC).

The agency said it is stepping in because the underfunded retirement plan will be unable to make benefit payments and be abandoned after SVCMC’s assets are liquidated, its activities cease, and there is no one left to administer the plan. No asset buyer has agreed to assume responsibility for the plan.

Shortly after filing for bankruptcy on April 14, 2010, the hospital and health care system based in New York City’s Greenwich Village received New York State Department of Health approval of its plan to close the hospital. By the end of May, all patients had been discharged or transferred to other facilities and debtors began selling off SVCMC’s assets and ongoing businesses.

A PBGC news release said the Saint Vincent Catholic Medical Centers Retirement Plan is 55% funded, with assets of $345 million to cover benefit liabilities of $622 million. The agency expects to cover about $267 million of the $277 million shortfall.

Assumption of the plan’s unfunded liabilities will increase the PBGC’s claims by $266.9 million and was not previously included in the agency’s fiscal year 2009 financial statements.

The agency said it will not have specific information about SVCMC pension benefits until it becomes trustee of the plan.